Jetstar Asia Closure and Rising Costs Pose Challenges Despite Qantas’ Strong FY25
Qantas Airways reported a robust 15% increase in underlying profit before tax for FY25, driven by strong operational performance and strategic fleet investments. The airline also announced a fully franked final dividend and special dividend, underscoring its financial strength and shareholder focus.
- Underlying profit before tax rises 15% to A$2.394 billion
- Statutory profit after tax reaches A$1.605 billion
- Net debt maintained at A$5.0 billion within target range
- 29 new and mid-life aircraft delivered, advancing fleet renewal
- Fully franked final dividend and special dividend totaling 26.4 cents per share
Strong Financial Performance Amid Recovery
Qantas Airways Limited has reported a strong financial performance for the fiscal year ended June 30, 2025, with an underlying profit before tax of A$2.394 billion, marking a 15% increase from the previous year. Statutory profit after tax also rose to A$1.605 billion, reflecting the airline's successful navigation of post-pandemic recovery challenges and operational improvements.
The Group's operating cash flow reached A$4.3 billion, supporting a solid balance sheet with net debt held at A$5.0 billion, comfortably within the targeted range of A$4.6 to A$5.7 billion. This financial discipline has enabled Qantas to maintain its investment-grade credit rating from Moody’s, with a net debt to EBITDA ratio of 1.3x, well below the Baa2 threshold of 2.5x.
Fleet Renewal and Operational Highlights
FY25 saw significant progress in Qantas' fleet renewal program, with 29 new and mid-life aircraft delivered, including the first Qantas A321XLR and multiple QantasLink A220s and Jetstar A321LRs. These additions are part of a broader strategy to enhance operational efficiency, reduce fuel consumption, and expand network flexibility.
Customer satisfaction metrics improved notably, with a 10-point uplift in Qantas’ Net Promoter Score (NPS) and a 6-point increase for Jetstar. On-time performance also improved, contributing to a better travel experience. The Group’s dual-brand strategy continues to drive success across domestic and international markets, supported by investments in lounges, digital transformation, and enhanced inflight services.
Loyalty Program Growth and Community Investment
Qantas Loyalty remains a key growth engine, with an 8% increase in active members and a 9% rise in underlying EBIT. The program’s expansion includes new retail partnerships and innovative reward offerings, such as the Classic Plus fare, which has driven increased points redemption and member engagement.
The airline also reinforced its commitment to community and sustainability, investing in regional connectivity, Indigenous business procurement, and environmental initiatives like sustainable aviation fuel (SAF) development and carbon offset programs. These efforts align with Qantas’ broader ESG goals and its purpose of fostering pride and belonging among customers and employees.
Outlook and Strategic Priorities
Looking ahead to FY26, Qantas expects continued growth in revenue per available seat kilometre (RASK) across domestic and international segments, supported by strong travel demand and ongoing fleet modernization. Net capital expenditure is forecast between A$4.1 billion and A$4.3 billion, reflecting sustained investment in new aircraft and technology.
The closure of Jetstar Asia, completed in FY25, is expected to incur additional costs in FY26 but aligns with the Group’s strategy to recycle capital and focus on core markets. Management remains committed to disciplined capital allocation, targeting returns on invested capital above 10% and maintaining shareholder distributions, including fully franked dividends.
Bottom Line?
Qantas’ FY25 results underscore a resilient recovery and strategic momentum, setting the stage for continued growth and innovation in a competitive aviation landscape.
Questions in the middle?
- How will the closure of Jetstar Asia impact Qantas’ international growth strategy long term?
- What are the risks and opportunities associated with the increased capital expenditure forecast for FY26?
- How effectively can Qantas leverage Project Sunrise and new fleet technology to sustain competitive advantage?
